Question 4 (20 marks)
The Department of Economics commissioned by the Government, intends to provide insight on the impact of human capital, brain drain, corruption and Foreign Direct Investment (FDI) on productivity. You estimated the following model. The regression results are provided below. Here productivity is the dependent variable.
Method: Least Squares
\table[[Variable,Coefficient Std. Error],[,,],[human capital,0.55543,0.1537],[corruption,-0.22835,0.0467],[brain drain,-0.98720,2.1208],[FDI,0.29996,1.5144],[,,]]
a) All other factors being equal, test the hypothesis that corruption has no effect on producitivty in Jamaica?
(7 marks)
b) All other factors being equal, test the hypothesis that braindrain decreases productivity.
(6
marks)
c) All other factors being equal, test the hypothesis that a FDI has a positive effect on Jamaica's productivity?
(7 marks)
(Total 20
Marks)
-Use the 5% level of Significance for all tests unless stated otherwise-